Impala Platinum Declines After Black Shareholder Sells Stake

  • Black holdings in Rustenburg mine fall below legal threshold
  • Threshold subject of court case between mines chamber, state

Impala Platinum Holdings Ltd. fell after saying the number of shares held by black investors in its largest operation fell below a disputed legal threshold after Royal Bafokeng Holdings (Pty) Ltd. sold a 5 percent stake in the world’s second-biggest producer of the metal.

Black-controlled Royal Bafokeng reduced its stake in Impala to 6.3 percent, the Johannesburg-based platinum producer said in a statement on Monday. The sale accounts for a stake of about 8.3 percent in the Rustenburg Lease asset, which is now 18 percent controlled by black holders after the Royal Bafokeng share transaction, said Johan Theron, a spokesman for Impala.

The government requires that black citizens own at least 26 percent of an operation at all times, a decree that the Chamber of Mines, which speaks for most producers, is disputing in court. The shareholding is a legal requirement for licenses to operate.

Whether Impala will need to conclude a new black shareholding transaction depends on the outcome of a court case in which the chamber is asking that companies should be credited with meeting the minimum requirement even if those stakes were later sold. South Africa’s push for increased black ownership of the mining industry, which accounts for almost half of the country’s exports, is part of an effort to address the legacy of apartheid that locked the black majority out of key industries.

Shares Decline

Impala fell 3.2 percent to close at 44.02 rand in Johannesburg.

“Assuming companies lose this court case, they’ll need to pump in new cash to remain black-empowered,” Sibonginkosi Nyanga, an analyst at Momentum S.P. Reid, said by phone. “These deals have been expensive to shareholders, so some may be taking cautionary measures by selling out.”

Other companies in South Africa, the world’s largest platinum and manganese producer, that may fall short of meeting the black-shareholding requirement due to beneficiaries selling down their stakes include Anglo American Platinum Ltd. and Sibanye Gold Ltd.

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